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TMI Blog2013 (5) TMI 709X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer & as he conducted the enquiry and proceeded against the appellants in a just and fair manner by affording reasonable opportunity of being heard and producing the documents and reply in support of their case. The requirement of framing a Code of Conduct for prevention of insider trading by the companies is a mandate of law and nobody can be allowed to violate the same. Similarly, the requirement of communicating the decisions of the Board of the company to the Stock Exchange promptly is an important check on the unscrupulous persons who may utilise the information for their personal gains in an improper and illegal manner and thereby jeopardizing the interest of bonafide investors. In the present case, the requirement of conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s as to the quantum of penalty. Today, Shri Rao appears and fairly submits that his clients are prepared to pay a consolidated amount of Rs. 5,00,000/- in all three appeals. This aspect will be looked into at the time of passing of final order in the three appeals after hearing learned counsel for the parties. 2. With the consent of the parties all the three appeals have been heard together as they involve common questions of law and fact. Appeal no.16 of 2013 has been filed by Sunday Exports Limited, a company listed on the Bombay Stock Exchange Ltd. (BSE) against order dated November 01, 2012 imposing a penalty of Rs. 2,00,000/- by the learned Adjudicating Officer of the respondent Board under section 15-I(2) of the Securities and Excha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi and it is Appellant No. 5. 5. The Tribunal has heard both the learned counsel for the parties at length and the pleadings and documents have been perused minutely. Brief facts leading to the present appeals are that the Board conducted investigations in the dealings in the scrip of the company for the period from April 15, 2010 to July 21, 2010. The said investigation revealed that the company had not framed the Model Code of Conduct for prevention of Insider Trading prior to November 25, 2010 as prescribed under section 12(1) of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992 (referred to hereinafter as PIT Regulations). It was also noticed that the company approved the unaudited accounts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15HB of the Act. Allegation was also levelled against them in respect of violation of clause 41(f) of the Listing Agreement read with Section 21 of the SCRA and clause 2.0 as specified in Schedule II of Code of Corporate Disclosures Practice For Prevention of Insider trading. 7. In the above circumstances, the Board appointed Shri P.K. Kuriachen as the learned Adjudicating Officer in the whole matter by order dated May 03, 2012. He issued two show cause notices dated May 30, 2012 to the appellants in Appeals no. 16 and 17 of 2013 respectively to show cause as to why an inquiry should not be held against them as per law for the alleged violations. In the matter of Appeal no.18 of 2013 separate show cause notices dated June 21 and 22, 2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Adjudicating Officer held that the appellants therein violated the provisions of clause 1.2 of the code of conduct specified under Part A of Schedule I read with Regulations 12(1) and 12(3) of the PIT Regulations. Turning to Appeal no.18 of 2013 it is noted that the learned Adjudicating Officer held Appellants no.1, 3 and 4 guilty of violating clause 1.2 of the Code of Conduct as specified under Part A of Schedule I read with Regulation 12(1) and 12(3) of the PIT Regulations. The learned Adjudicating Officer also found that a profit of Rs. 3015/- was earned by Appellant no.2 and a profit of Rs. 1,07,868/- was earned by Appellant no.5 by purchasing/selling shares under the unpublished price sensitive information period. The learned Adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ersonal gains in an improper and illegal manner and thereby jeopardizing the interest of bonafide investors. In the present case, the requirement of conveying the Board's important decisions to the Stock Exchange within 15 minutes is a crucial provision binding on the company and the same is having an underlying object which can only be achieved by quick communication of the said decision by the company to the Stock Exchange. The appellant can have very well conveyed the said decision by way of fax or e-mail etc. within 15 minutes so as to avert the possibility of being misused the sensitive information in question. In view of this, the three impugned orders are upheld. 12. However, taking into consideration the totality of facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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